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In the fine print, city agrees to pay for additional costs of Central Avenue bridge

Developer Michael Beatty is not required to share any costs of the bridge construction. A Brew exclusive.

central ave bridge site

A duck navigates the 260-foot-wide inlet that separates Harbor Point from Harbor East, the site of the future Central Avenue bridge.

Photo by: Mark Reutter

Baltimore taxpayers are on the hook for potentially millions of dollars of costs related to the new Central Avenue bridge linking upscale Harbor Point with Harbor East.

The city has agreed to pay for any additional bridge costs not covered by TIF (tax increment) bonds issued for public infrastructure at the waterfront site, documents reviewed by The Brew show.

These costs – which have escalated as the estimated cost of the bridge has risen – could amount to as much as $3.4 million.

It wasn’t advertised to be like this.

Last summer, the Rawlings-Blake administration said that TIF (tax increment) bonds would pay for all of the public infrastructure costs at Harbor Point, including roads, parks, a promenade and the Central Avenue bridge.

But documents signed by Mayor Stephanie Rawlings-Blake, the Baltimore Development Corp., and Department of Transportation (DOT) in the last few weeks make it clear that the city does not anticipate the TIF bonds to cover all of the costs of the bridge and related streetscape improvements.

In a “memorandum of understanding” approved by the Board of Estimates on January 8, DOT director William M. Johnson agrees that the city will pay all “eligible costs” in excess of the $6.6 million in TIF funds allocated for the project.

And in a private placement memorandum signed by Mayor Stephanie Rawlings-Blake, the city agrees to assume “all costs in excess of the budgeted [bridge] costs, including the cost of all applicable change orders and supplements.”

The Brew obtained copies of these agreements through a Maryland Public Information Act (PIA) request.

The city has signed an agreement with developer Michael Beatty agreeing to pay for costs above the TIF bond allocation of $6,562,620. (From "Memorandum of Understanding Between and Among the Mayor and City Council of Baltimore, the Baltimore Development Corporation and Harbor Point Open Space Corp. Regarding Construction of the Central Avenue/Harbor Point Connector Bridge," January 2014.

The city has signed an agreement with developer Beatty agreeing to pay for costs above the TIF bond allocation of $6,562,620. (From “Memorandum of Understanding Between and Among the Mayor and City Council of Baltimore, The Baltimore Development Corporation and Harbor Point Open Space Corp. Regarding Construction of the Central Avenue/Harbor Point Connector Bridge,” January 2014)

Costly Project

The Central Avenue bridge is the most expensive capital transportation project currently underway in the city.

It will consist of an approximately 260-foot-long and 70-foot-wide structure over a tidal inlet. The bridge is being designed to accommodate four traffic lanes, two bicycle lanes, a sidewalk and a 12-foot-wide promenade.

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The city has diverted $29.8 million in federal funds to the Central Avenue project, including funds slated for the realignment of Boston Street in Canton.
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Harbor Point’s developer, Michael S. Beatty, has agreed to share in the planning and permit-gathering for the bridge, but is not required to share any costs of bridge construction.

As The Brew previously disclosed, the city plans use a large share of future federal highway grants to pay for the bridge and related “streetscape” improvements on Central Avenue.

The city has diverted $29.8 million in federal funds originally slated for other city roads projects, including the realignment of Boston Street in Canton, to the Central Avenue project.

Additional federal funds will pay for the building of other public roads at Harbor Point.

Escalating Costs

Eighteen months ago, city records show, the Central Avenue project was budgeted at $25-$35 million.

DOT director William H. Johnson agreed to the bridge terms.

City DOT director William Johnson agreed to the bridge terms.

The cost has jumped to $40-$50 million, according to a “Notice to Potential Bidders” issued by DOT last November.

Even with the maximum allocation of federal funding, the city’s matching share would amount to $8-$10 million, whereas the TIF funds currently allocated for the bridge is $6.56 million.

This leaves a gap of $1.44 million to $3.44 million that the city agrees to pay.

Anticipating this shortfall, the city says will look for “expenditures . . . which may create eligibility” for additional federal or state transportation funds, but if that quest fails, the city will pay the costs out of annual appropriations.

The document goes on to say that the city could reimburse itself for up to $3.8 million in future TIF bonds issued for Harbor Point infrastructure.

Premature to Comment

During last summer’s City Council debate over TIF subsidies for Harbor Point, DOT declined to provide specifics about the anticipated costs of the Central Avenue bridge.

Asked about those costs by The Brew this week, a departmental spokesperson replied in an email:

“It is premature at this time for us to provide any comment regarding the cost of the Central Avenue Phase 2 project since the RFQ was recently issued.”

A Request for Qualifications (RFQ) was issued on January 14, seeking potential contractors for the bridge and streetscape. Candidates will be narrowed through a qualification review this spring, with a Reduced Candidate List (RCL) of contractors eligible to bid on the contract in late summer.

In its RFQ, DOT says it preliminarily hopes to open the Central Avenue bridge to traffic in February 2016, or about six months after Beatty plans to complete the Exelon Tower, the first major building of his planned $1 billion office and residential community.

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  • Tom Gregory

    Let’s see how long it takes the Sun to report these unsettling findings, if ever.

  • Gerald Neily

    The bridge width math can’t be right. If the structure is 50 feet wide and includes a 12 foot wide promenade, that only leaves 38 feet for the four traffic lanes, two bike lanes and the other sidewalk. That’s less than what would be needed for the traffic lanes alone.

    • baltimorebrew

      Gerry, you are correct. I misread that there are two ten-foot lanes in each direction, meaning 40 feet, not 20. Altogether, the bridge will be about 70 feet wide. I will correct in the text of the story. –mr

  • trueheart4life

    Wow! You seem to have forgotten that the issues of Mr. Chow’s residency in Baltimore and the exorbitant rate increases that are promised in future years were brought to light during the hearing by an outraged citizen! More citizens should have been in attendance!!!

  • bmorepanic

    I’m so glad that the Harford Road bridge, scheduled for replacement over 10 years ago because its in failure will have to wait for yet another funding cycle as will many other road projects.

    I am thrilled that making already rich corporations happy is what my tax dollars actually do. Particularly knowing the benefit amounts to shaving about 3 blocks from the commute of people who live in the county versus the potential loss of life for everyday citizens. Nobody knows what would happen if the Harford Road bridge becomes the Herring Run Dam.

    I will remember my happiness when it comes time to vote. I hope everyone else does also.

    • River Mud

      Oh I’m sorry sir/ma’am. That bridge is filed under “non-waterfront neighborhoods where poor people live.” Unfortunately we can’t obligate any funds to that category.

  • BmoreFree

    I would like a mayor who would promise to be transparent and straightforward with tax payers. Its not that I don’t understand the corporate welfare economic strategy behind this endeavor – it is the lying to the public that just gets to me…

    • Paul Gregory

      It is not for no reason that SRB was selected as the worst mayor in America.

  • Paul Gregory

    The following is from a petition by Paul Gardner at Change.org
    “In its current form, the proposed tax break for Harbor Point is unacceptable. On top of $107 million handed outright to the developer, and $113 million in tax breaks that have already been awarded to the project, the city would stand to lose another $174 million from interest payments on the bonds, and a $200 million loss of public school financing from the state. Baltimore’s newest, richest community would remain tax-free for over 20 years, while public services in the city’s poorest neighborhoods will continue to be cut.”
    This is why we plan on retiring away from here!

    • Day_Star

      And if it doesn’t get built the City gains. . . nothing. The “losses” you state are only true in an alternative, fantasy universe where real estate developments get loans from banks and equity from investors regardless of the ability (or risk) to make debt payment or provide a market rate return/profit to persons and groups that can just as easily invest in a project in DC, NYC or Miami. Will the schools be better off if the project doesn’t happen? Of course not and anyone with a basic understanding knows that. The benefits to the City far exceed the costs to the City that aren’t directly financed by the project itself through increased tax assessments on commercial development and not a pile of chromium.
      Sure, the money for the bridge could be better spent elsewhere. No need to misinform people to get to that point by saying ridiculous statements like Harbor Point is costing the school $200 million or giving the impression to either the uninformed or daft minded that the City is handing Beatty $107M when you know full well it’s being provided by bond holders.

  • wje811

    I stood up at the Fell’s Point neighborhood Association meeting and asked this very question,” Who is going to pay for ANY cost overruns on the bridge?” One of Beatty’s yes men said , ”We will pay for any cost overruns.” They have no problem lying right to your face.

    • Steve Bunker

      Beatty has never had difficulty telling communities what they would like to hear regardless of the truth.

    • Steve Bunker

      Beatty has never had any trouble telling a community whatever will make them happy and encourage them to go away. An oily fellow with a smile, combed hair and shined shoes. Never trust him.

  • KnowNothingParty

    Mayor Stephanie Failings Blake may just put speed cameras on each end of the bridge to produce a bunch of fraudulent “speeding tickets” to pay for it.

  • Matthew Riesner

    I think this is a terrible use of the land. I think it would be better suited for having a new cruise ship terminal. Having a cruise ship terminal would bring tourists with money directly into our city’s Disneyland Borough (Harbor East and the Inner Harbor). This would serve our city better by increasing foot traffic to businesses and showcasing our new, less industrial areas to outsiders (like where the current cruiseship terminal is located).

    • Aaron Mirenzi

      I think cruise ships leaving from port convington are only docked for passengers to either start or end their journey. Meaning tourists might not come from other places and visit baltimore via these cruises. Tho I could be wrong.

  • burgersub

    ever since i found out that there is an old stream (harford run) undernearth central avenue, i’ve fantasized about opening it back up. think about it, it even runs right alongside little italy, it could be like a crappy little venice.

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